Many digital cameras can also save their images as RAW files. These are unprocessed digital camera images. Photoshop can process them to a higher-quality image than JPEG files. One of the biggest advantages of RAW files is they have more that 8 bits per channel of information and can, therefore, be edited more than JPEG files. Every camera manufacturer has its own proprietary RAW file format, the term RAW refers to a category of file formats. It encompasses a wide range of formats include NEF (Nikon RAW), CRW (Canon), as well as many other formats. Adobe Photoshop CS2 supports most RAW file formats.
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I strongly recommend starting out with a well-defined workflow for editing digital images in Photoshop. Since Photoshop has so many different options, it's almost impossible to keep track of how to perform all of them. The workflow structure helps you tighten your focus on key tasks during each individual stage as you move through the editing process. Even after working with Photoshop for many years, I use this workflow to help me organize my editing process.
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Although we usually tend to think of the digital camera as the best thing since sliced bread, there are both pros and cons with its use. Nothing is available on the market that does not have both a good and a bad side, but the key is to weigh the good against the bad in order to come up with the best of both worlds.